Persistent risks of Middle East conflict spillover continue to pressure equity markets, a situation from which no market can fully insulate itself, though the degree of impact varies. Domestically, the influence appears minimal. Reflecting this, the Hong Kong market declined by 0.70% today. Iran is demonstrating increasing confidence, announcing the conclusion of reciprocal strikes and transitioning to a campaign of sequential attacks with no upper limit and an accelerated pace. This shift from a defensive to an offensive posture indicates Iran is dictating the conflict's tempo. Furthermore, Iran has presented new ceasefire conditions: 1. Recognition of Iran's legitimate rights; 2. Payment of war reparations; 3. International guarantees against future aggression. These terms are unlikely to be accepted by the US and Israel, as they equate to a form of surrender, making a ceasefire improbable and suggesting continued hostilities. In response, US media and officials have recently collaborated to release alarming reports highlighting alleged "Iranian threats" to the homeland, including potential targets like the Oscars ceremony, drone attacks on the West Coast, and increased risks of "lone wolf" or sleeper agent attacks. Such rhetoric appears aimed at garnering support for military action and potentially justifying strikes.
Amid its domestic challenges, the US continues to pursue tariff policies. The US government stated on Wednesday it would initiate two new trade investigations targeting "excess industrial capacity" in 16 major trading partners, including China. According to US Trade Representative officials, this could lead to new tariffs, though the strategic value of such measures appears diminished. Ultimately, historical fear of the US stemmed primarily from its military might, which is now being tested. Within just two weeks, former President Trump has suggested a withdrawal, stating there are "no targets left" to strike in Iran—a potential exit strategy. If the US disengages, Israel would likely struggle to withstand the conflict alone. Global anxiety largely stems from oil supply concerns, as disruptions to this critical resource create widespread vulnerability. The International Energy Agency (IEA) announced on the evening of March 11 that its 32 member countries unanimously agreed to release 400 million barrels of strategic petroleum reserves. This initially pushed WTI and Brent crude prices lower, but they quickly rebounded. The rationale is straightforward: unless the Strait of Hormuz is fully reopened for shipping, strategic reserves offer only a temporary solution, implying confidence that the US can swiftly secure the vital waterway. Reports suggest several European nations are considering naval escorts, but feasibility is low. Even powerful US warships would be highly vulnerable and constrained in the narrow Strait, making a resolution nearly impossible short of a ceasefire, which seems distant until one side suffers significant losses.
Shares of CNOOC (00883), a resilient performer, rose nearly 4%, while Shandong Molong (00568) surged over 11% intraday before settling around a 2% gain, movements driven by sentiment amid an uncertain outlook. The growing role of alternative energy has been repeatedly highlighted. Institutional analysis suggests that a prolonged closure of the Strait of Hormuz could increase global power-sector coal demand by 84.86 million tons annually. Concurrently, supply is tightening; since the start of the year, Indonesia's official policy to reduce coal production quotas has led many mines to cut spot exports, creating tight supply for Chinese coal imports. If China's coal chemical plants operate at full capacity, this alone could boost domestic coal consumption by nearly 50 million tons. Yesterday's mentioned stocks, Yankuang Energy (01171), Power Glory Development (01277), China Coal Energy (01898), and Yancoal Australia (03668), all gained over 5%. The fertilizer supply shortage linked to Middle East conflicts, discussed yesterday, saw related stocks like CNOOC Chemical (03983) and Sinochem Fertilizer (00297), a March top pick, rise over 6%. Agricultural machinery is also gaining traction, with First Tractor (00038) up over 8%. The aluminum sector is affected; while Alba's production in Bahrain continues, transportation disruptions due to geopolitical conflicts prevent normal deliveries, leading to a force majeure declaration on supply contracts. Alba's production is expected to reach 1.622 million tons by 2025. Qatar Aluminum (Qatalum) began an orderly shutdown on March 3, expected to conclude by end-March, impacting 650,000 tons of annual aluminum capacity, with a potential 6-12 month restart period. Institutions note that Middle Eastern aluminum smelters hold approximately 30 days of alumina inventory. A Strait of Hormuz closure exceeding 20 days could force controlled shutdowns in Iran, Qatar, and Bahrain; a closure beyond 30 days risks idling about 6 million tons of regional capacity. Innoviz (02788) surged over 11%, while March top pick Aluminum Corporation of China (02600) and China Hongqiao (01378) both gained around 4%.
The methanol sector is also reacting. The Middle East accounts for about 70% of China's methanol imports. Conflict-related logistics disruptions and rising natural gas prices have pushed methanol futures to limit-up gains. China Sunrise Group (01907), China's largest coke oven gas-to-methanol producer (600,000 tons/year), uses self-produced coke oven gas, making it completely independent of natural gas/imported methanol with locked-in costs and maximum profit flexibility. Each 100 yuan/ton increase in methanol prices adds approximately 60 million yuan to annual profits. The stock soared nearly 40% today. The newly released "Data Center Green and Low-Carbon Development Action Plan" mandates that new data centers in national hub nodes source over 80% of their electricity from green sources, incorporating renewable energy targets into energy conservation reviews. This directly catalyzes green power stocks. Related companies like wind power player Goldwind Technology (02208) rose over 7%. Datang Power (00991) and Xintian Green Energy (00956) gained over 4%.
JD-linked stocks have shown notable strength recently, such as JD LOGISTICS (02618). This strength is partly attributed to ARK Invest founder Cathie Wood's significant purchases of JD Logistics, based on her view that the next AI breakthrough lies not in the cloud but at the connection point between cloud and ground. JD.com's founder's heavy investment in building its own logistics network has proven correct, directly enhancing efficiency, outperforming former strong competitor Suning, and evolving JD Logistics into a large-scale supply chain infrastructure platform. From automated warehouses to intelligent sorting centers and a nationwide storage and distribution system, the company has established a highly digitalized logistics network. This deep competitive moat avoids direct competition with traditional courier companies. The stock rose over 4% again today, bringing short-term gains close to 50%. Another JD entity, JD INDUSTRIALS (07618), has upgraded from an "e-commerce derivative business" to a "core industrial supply chain player," gaining over 5% today.
The automotive sector remains challenging. The Passenger Car Association reported February China auto sales of 1.04 million units, a 25.9% year-on-year decline. After brutal competition in 2025, Geely Auto (00175) is relatively leading the market among traditional automakers, while NIO (09866) and XPENG (09868) lead among new players. Other brands require further catalysts to break through. The market also faced headwinds today: Hong Kong's Independent Commission Against Corruption (ICAC) and the Securities and Futures Commission (SFC) launched a joint operation, codenamed "Fuse," on March 10-11, targeting suspected insider trading and corruption. The scheme involved brokers, hedge funds, and intermediaries profiting from leaked placement information and short selling. Cathay Haitong (02611) fell over 4%.
The recently active "Lobster" theme cooled. On March 10, the National Internet Emergency Center issued a risk warning concerning the OpenClaw security application. Subsequently, multiple universities, including Zhuhai College of Science and Technology, Anhui Normal University, and Jiangsu Normal University, issued emergency notices prohibiting the installation and operation of OpenClaw on campus office equipment and networks due to high-risk security vulnerabilities. The application possesses high automation permissions, posing data leakage risks, and heavily consumes tokens by calling various models, risking cost surges. Zhipu (02513), MINIMAX (01000) fell over 5%, and SenseTime (00020) declined over 8%.
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